9/14/12: Poloncarz Issues Declaration of Need on County Borrowing

ERIE COUNTY, NY— Today, Erie County Executive Mark C. Poloncarz issued a formal Declaration of Need requesting the Erie County Fiscal Stability Authority (“ECFSA”) to issue a mirror bond anticipation note for the County’s 2012 Revenue Anticipation Note (“RAN”). After examining the best available interest rate and costs for the proposed transaction, ECFSA was able to secure a lower overall cost for the borrowing than could be attained by Erie County, prompting the County Executive to issue the declaration. The amount to be borrowed will not exceed $75 million.

“By issuing this declaration of need, I am fulfilling the commitment I made to the Legislature and ECFSA Chairman James Sampson to conduct the borrowing through the party able to secure the lowest overall cost, and in this case it was the Erie County Fiscal Stability Authority,” said Poloncarz. “This is a short-term loan which will be paid back in less than one year, and it makes sense to have the ECFSA do the borrowing, as this will cost the County approximately $50,000 less than borrowing through the Comptroller’s office.”

Poloncarz added, “It is important to note the difference between short-term and long-term borrowing, especially when borrowing through the ECFSA. Long-term borrowing results in the ECFSA continuing to exist through the lifetime of the loan, however long that may be. A less than one-year note such as this does not extend the life of the ECFSA at all. I ask the Legislature to approve the Declaration of Need, as well as the 2012 RAN resolution, when they meet on September 20.”